Saturday, May 13, 2017

As
the world’s third largest donor of foreign aid after
the U.S.and Germany,
the U.K.may
be tempted to follow a trend of using aid funds to pay for hosting
refugees.

The
Organisation for Economic Co-operation and Development’s Development
Assistance Committee(DAC),
the organization that coordinates the activities of Western aid
donors, sets the guidelines on what can be counted as aid – or
“official development assistance”, to use DACjargon.Most
people would assume that what is reported as foreign aid by a donor
actually goes to support development projects in poor countries. In
reality, however, a number of expenditures can be classified as
foreign aid, giving donors large scope in how to organize their
international development activities.Expenditures
such as membership fees of certain international organizations,
peacekeeping, promoting the peaceful use of nuclear energy,
scientific cooperation, and even debt relief can all be classified as
foreign aid. A donor’s administrative costs related to aid
delivery, and the promotion of development awareness within the donor
country can also be reported as aid, and so can the costs of caring
for refugeesin
the donor country (during the first year following their arrival).

NGOs
have been highly critical about reporting refugee costs, debt relief
and donor administrative expenses as foreign aid. Some have been
running a campaign
to exclude these expenses from aid-eligible costs, and force donors
to focus on “genuine” aid. They define this as aid that is
actually spent in a recipient country, rather than the donor country.Since
1988, donors have been able to include the costs of caring for
refugees – such as costs for housing, refugee camps, education and
living allowance for asylum seekers – as part of their aid.
Europe’s refugee crisis has led to a significant increase in
this practice.

Germany’s
foreign aid, for example, jumped from almost $18 billion in 2015 to
more than $24.5billion
in 2016, mainly due to an increase in refugee costs. In-country donor
refugee costs accounted for 38 percent of all aid in Austria in 2016,
and 34 percent, 25 percent and 22 percent in Italy, Germany and
Greece respectively. The average for all Western donors was close to
11 percent in 2016.The U.K.has
so far been among the few donors who have tried to keep their foreign
aid as “genuine” as possible, and did not include many refugee
costs in these statistics.

Historically,
refugee costs made up around 0.1 to 0.3 percent
of all U.K. aid,
and while an upward trend began after 2013, it was still among the
lowest among Western donors at 2.2percent
in 2015. This means that there is considerable scope for the U.K.to
divert a part of its aid budget to fund the costs of hosting
new refugees.The
government should not do even more to undermine it by cutting genuine
aid to spend it on hosting refugees in the U.K.
Diverting
a part of the aid budget to fund refugee costs could embolden other
demands for diverting aid. Some of these, such as the foreign
secretary Boris
Johnson’s ideaof
buying off Eastern European E.U.members
to support U.K.demands
during the Brexit negotiations.